Economic analysis of firewood marketing in Uyo capital city, Akwa, Ibom state, Nigeria
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Eurasscience Journals
Eurasian Journal of Forest Science (2017) 5(2): 26-43
Economic analysis of firewood marketing in Uyo capital city, Akwa,
Ibom state, Nigeria
Imaobong Ufot Nelson1, Enefiok Sunday Udo1, Daniel Etim Jacob1*
1
Forestry and Natural Environmental Management Department, University of Uyo, Nigeria
Corresponding author: danieljacob@uniuyo.edu.ng
Abstract
This study ascertained the profitability and determining factors influencing firewood marketing in Uyo Capital
City. The study used structured questionnaires and interview schedules to collect its data. The questionnaires were
randomly administered to 75 firewood traders in the markets (Itam market, Akpan Andem market and Afaha market)
being 67% of the population frame. Data obtained were analysed using descriptive statistics, budgetary technique,
profitability analysis and regression analysis. The result showed that majority of the respondents were female (92%),
were above 30 years of age (83%), were literate (93%), married (73%) and had a household size of 1-5 persons (53%).
Also, majority of the traders (72%) had been in the trade for more than 10 years, were engaged at full-time (76%) basis,
63% belonged to an association, started the trade with their personal funds (88%). The trade was profitable with a mean
income of $94 (₦34105.20) monthly. The regression coefficient (R2) indicated that the income determinants accounted
for 56.5% of the variations in the receipts from firewood sales. Mode of engagement and scale of operation had
significant and positive effect on revenue (pEurasian Journal of Forest Science 5(2):26-43 (2017)
Introduction
Forests are widely recognized as a source of various essential goods and services (DWAF, 2005). In
addition to the physical contribution to the environment, forests also provide ecological, economic, social,
religious and cultural benefits (Mainagwa, 2010).According to Nzeh and Eboh (2007), forests contribute
directly and indirectly to rural household livelihoods through the generation of income and employment
from the sale and exchange of gathered and unprocessed non-timber forest products such as firewood. The
term non- timber forest products (NTFPs) emerged as an umbrella to recognize the products derived from
these various forest resources as a group (Ibrahim et al., 2016). The list of NTFPs is inexhaustible specific
as they include plants used for firewood, handicrafts and carvings, plants used for firewood, condiments,
fodder, chemicals, medicines and even shade (Ogboho, 2014; Ibrahim et al., 2016). The term firewood or
fuelwood consists of any unprocessed woody biomass used to fuel a small fire, most often for cooking or
warmth (Boucher et al., 2011).
Fuelwood is the fourth largest energy source providing about 13% of the total energy consumption
globally (Magembe and Makonda, 2016). It is consumed mostly by the low income and middle income
households as well as operators of cottage and small scale industries and commercial enterprises. Most of
these fuelwood comes from forests mainly in the form of wood and charcoal. However, wood with higher
density is better suited as fuelwood because it has high calorific value (Magembe and Makonda, 2016)
In Nigeria, Among all the tree products utilized as fuel, firewood is the most utilized of them (Ezema,
2001). The rural population traditionally relies on these fuelwoods for both home consumption and for
sales to the urban sector. It is estimated that 70–79% of households use fuelwood as a main source of
energy (Hafeez 2000; Ayotebi, 2000; Chukwu, 2001; Abebaw, 2007).
Fuel wood is major business in the urban and peri-urban centers in Nigeria. Fuel wood marketing like
every other marketing enterprise involves the exchange between a buyer and a seller at a given price in such
that the seller meets the total cost and the profit margin (Kalu et al., 2009). Marketing of firewood is simple,
basically from producers to consumers in most cases except in few cases where urban firewood sellers come
to buy in bulks. Large number of prepared- food vendors such as restaurants, vendors of barbecue (Suya)
and party event outfit that served at celebrations and bakeries are regular customers of fuelwood sellers but
institutions such as hospital, schools and prisons and also industries such as blacksmiths are among the
highest fuelwood consumers (Larinde and Olasupo, 2011).
There are diverse reasons for choosing wood as a source of energy. For many users the choice depends
on the availability and affordability of other energy options (Horgan, 2001).In the past, wood harvesting in
developing countries was mainly for domestic consumption, and it was mostly women who gathered the dry
branches and trunks of trees and shrubs for fuelwood (Awah 1995). Today the situation has changed, as
increased commercialization of the sector has led to the widespread harvest of both dead and live branches
and trunks by men and women (Awah 1995). Fuelwood is harvested, processed, marketed and consumed
exclusively by forest dependent communities, moving from collectors through wholesalers and retailers to
consumers. Firewood is forest product with little sophistication in length of processing and marketing, the
products reach the final consumers more or less directly. The fuelwood sector employs many men, women,
and children in both rural and urban areas, offering both temporary and permanent employment
opportunities. It is important economically because it offers an immediate source of income to the exploiters
(Larinde and Kehinde, 2004).
The use of fuel wood has been on the increase due to increase in cost and scarcity of alternative
sources, particularly Kerosene (Paul, 2008). In addition, firewood is consumed in large quantities in most
parts of rural Africa. In fact much has been known about the use, effect and exploitation of fuel wood but
barely little is known about its marketing(Taru and Ndaghu, 2013). Salisu (2008) showed that the efficient
functioning of the market system is based on a number of conditions. These include the existence and
efficiency of certain legal and institutional foundations that guarantee private property, a well developed
infrastructure that ensures reliable access to transportation and communication at minimum cost, and ready
information about quality that must be symmetric(Taru and Ndaghu, 2013). As identified by Taru and
Ndaghu (2013), the problems of firewood marketing include lack of uniform measures, high transport cost
27Economic analysis of firewood marketing Nelson et al. 5(2):26-43 (2017)
and storage problems among other problems. Sometimes the problem of transportation compels the firewood
harvesters to sell their products in the rural areas at low prices instead of conveying the commodity to the
urban areas where the price will be relatively higher. This could affect market performance of the good
(Osuji, 1980). Over time people have come to the realization of trading firewood as a sort of business but
little is known about the profitability of the business. In Uyo Capital City, there is little or no available data
on the amount of firewood sold.
Findings from this study are expected to provide information on firewood sources, cost and returns
and marketing channels of firewood in Uyo Capital City of Akwa Ibom State, thus bridging the information
gap that existed in addition to providing a baseline data that can stimulate further research in the area.
Materials and Method
Study area
Uyo Capital City (UCC) is the seat of both Akwa Ibom State Government and the Uyo Local
Government Area (L.G.A.). The Uyo Capital City Development Authority is charged with the responsibility
of physical development of the city, while the Uyo L.G. Council takes care of the day-to-day administration
of the town. Uyo is a city and local government area in south-south Nigeria and is the capital of Akwa Ibom
State, it is located on Latitude: 5° 03' and 4.57" N and Longitude: 7° 56' and 0.60" E. Its metropolis sprawls
into the adjoining local government areas of Itu, Ibiono Ibom and Uruan Local Government Areas (Uwem
et al.,2015).Uyo Capital City is bounded in the North by Itu and Uruan L.G.A. and on the South by Uruan
L.G.A. and encompasses parts of other L.G.A. like Uruan, Itu, Ibesikpo Asutan, Nsit Ibom and Etinan. It is
about 5km radius from the center of the city (Ibom Connection). Uyo has a relatively high mean annual
rainfall of more than 2500mm and a mean annual temperature of 27̊ C. People residing in the city engage in
several occupations which range from the civil and public services, industrial and commercial business to
farming in parts of the urban area.
Sampling and data collection method
The target population for the study were firewood traders in Uyo capital city, Akwa Ibom State. The
sampling technique involved a purposive selection of three market areas in Uyo L. G. A. The three markets
chosen were Itam market, Afaha market and Akpan Andem market. This is because they are the major market
areas where firewood traders are found in Uyo Capital City. There were 78, 27 and 20 respondents in Itam
market; Afaha market and Akpan Andem market respectively, making a total of 125 respondents in the study
area. Selection of the firewood sellers was done using simple random sampling to select 60% of the
population frame in each market giving a total of 75 sample respondents.
Primary data for the study were obtained using structured questionnaire and oral interviews. The
structured questionnaires were pre-tested to identify problems with the drafted questionnaire. Copies of the
restructured questionnaires after pre-test were administered on the respondents in each of the selected study
areas. A total of 75 copies of the structured questionnaire were administered and all were completed and
returned for analysis.
Data analysis
Data collected during the study were analyzed using descriptive statistics, budgetary technique,
profitability analysis and regression analysis. Descriptive tools such as tables, frequency tables, percentage
and means were used to examine the sources of firewood and species traded in the study areas and
alsodemographic characteristics of firewood traders.
To determine the structure of the costs and returns associated with firewood marketing, budget
analysis was employed. The budgetary analysis focused on Gross Margin (GM) which is the differences
between the Total Revenue (TR) and the total variable cost (TVC). To obtain Net Return (NR), Gross Margin
(GM) was deducted from Total Fixed Cost (TFC) as used by Nelson (2015). The explicit form of the equation
is given as:
28Eurasian Journal of Forest Science 5(2):26-43 (2017)
GM = TR – TVC - - - - - - - - (Eq. 1);
Where,
GM = Gross Margin (Naira/Bundle);
TR = Total Revenue was obtained by adding the revenue from direct sales of firewood valued at the
prevailing market prices in naira;
TVC = Total Variable Cost comprised expenses on transportation, rent, cost of labour, cost of rope,
cost of firewood and market tax.
NR = GM – FC - - - - - (Eq. 2);
Where,
NR= Net Return
GM = Gross Margin (Naira/Bundle);
FC = Fixed Cost comprised expenses on axe, wheel barrow and machete/cutlass,
Also, profitability ratio such as profitability index (PI), rate of return on investment (RRI),rate of
return on variable cost (RRVC) as well as the operating ratio (OR) were used in determining the
profitability of firewood marketing as described by Azeez et al., (2014) is given as:
PI= ᴨ/TR - - - - - - - - (Eq.3);
RRI = ( ᴨ/TC) x 100 - - - - - - (Eq. 4);
RRVC = (TR-TFC/TVC) x 100 - - - - - (Eq. 5);
OR = TVC/TR - - - - - - (Eq. 6);
Where,
PI = Profit Index, Π = Profit, TR = Total Revenue, RRI= Rate of Return on Investment (RRI), TC
=Total Cost, RRVC = Rate of Return on Variable Cost, TVC = Total Variable Cost, TFC= Total Fixed Cost
and OR Operating Ratio.
The regression tool was employed to identify the factors affecting receipts from firewood trade. The
regression analysis helps one to understand how the typical value of the dependent variable changes when
any one of the independent variables is varied, while the other independent variables are held fixed. The a
priori expectation of the variables used in the model is indicated in table 1. The implicit form of the regression
equation as used by Nelson (2015) is given as:
Y = a + b1X1 + b 2X2 + b 3X3 + b 4X4 - - - - b 11X11+ μ - - - (Eq. 7);
Where,
Y= total revenue from the sales of firewood in naira ($);
a = constant, bi, where i =1, 2...11 were the regression co-efficient of X variable.
X1 = Age of respondent in years
X2 = Marital status (Married = 2, Single =1);
X3 = Educational status (years in school);
X4 = Years in business;
X5 =Transportation cost in naira ($);
X6 = Labour in man days;
X7 = Rent paid in Naira ($);
X8 = Gender (male = 0, female = 1);
X9= Household size;
X10 = Engagement (part-time = 0, full-time =1); and
X11= Purchase cost ($)
μ = factors that were not adequately accounted for but contribute to total revenue.
29Economic analysis of firewood marketing Nelson et al. 5(2):26-43 (2017)
Table 1: An a priori expectation of variables
Dependent Explanatory Expected Explanations of the relationship
Variables Variables Signs
Output (Y) Marital Status + Output is related to marital status. This means that the more the
firewood traders are married with the responsibility of more
family members to cater for, the more output will increase.
Educational Status + Output is related to education. This means that the more the
firewood traders are educated, the more output will increase.
Age of Respondents + Output is related to age of respondents. This means that the
younger the firewood trader, the more output will increase.
Years in business + Output is related to years spent in firewood trade. This means that
the more the years spent in the firewood trade, the more output
will increase.
Transportation cost - Output is related to amount spent on transportation. This means
that the higher the cost of transportation, the more output will
decrease.
Labour - Output is related to labour. The more the man days are being
paid for, the more output will decreases.
Household size + Output is related to household size. The more the members of
the family, the more output will increases.
Purchase cost + Output is related to purchase cost of firewood. This means that
the higher the amount spent on purchasing firewood, the more
output will increase.
Engagement + Output is related to time spent in business. This means that the
more time spent in firewood trade, the more output will
increase.
Gender + Output is related to gender. Increase in more male traders will
result in increase in output.
Rent - Output is related to rent. As less rent is paid by the firewood
trader, output will increased
Result and Discussion
Demographic characteristics of respondents
The result in Table 1 shows that majority (92%) of the firewood traders in the study area were female
with only 8% accounting for the male. In the individual markets sampled, the female traders accounted for
94%, 88% and 83% of the respondents in Itam market, Afaha market and Akpan Andem market respectively
(Table 2). More than 80% of the sampled traders (81%, 87% and 83% in the three markets respectively) were
above 30 years of age. In total, 32% of the respondents were within the age class of 41-50 years, followed
by those between 31-40 years (28%), while respondents who were aged below 30years (17%) were the least
in number (Table 2). This implied that firewood trade in the study area was dominated by older matured
women with only few younger women involved in the trade. This observation was in line with the
observation of Adeyemi and Ibe (2014) who also reported that only few youthful women were engaged in
the business in Owerri North and West local government areas of Imo State. Age, according to Ndaghu et
al. (2011), plays a critical role in firewood trade, the more energetic an individual is, the higher the possibility
of him or her to perform better than the very young or very old marketers. This result also collaborated the
finding of Afolabi (2001) and Ikurekong et al. (2009) who reported that age of marketers had positive impact
on the business aggressiveness and flexibility in marketing activities.
Also, this study tends to portray the influence of age in the selection of trade considering that majority
of the firewood traders were older compared to a higher rate of younger people involved in ornamental trade
in the same study area (Nelson, 2015). The dominance of older women in the firewood trade may be due to
the fact that majority of them in this category lack sufficient money for a better business, as the trade could
be started with a minimal budget compared to ornamental trade that would require a sizeable amount of
capital (Nelson, 2015).
30Eurasian Journal of Forest Science 5(2):26-43 (2017)
Also, the predominance of female in the firewood trade was in line with the observation of (Futmina,
2016) who noted that as high as 88% of the fuelwood traders in Minna, Niger State were female. Also,
Observation from the study shows that the male counterparts were more involved in harvesting and
transportation of the firewood to locations, where the firewood were marketed as well as to the points of
consumption, while the children and youth help in cutting the firewood billets to appropriate sizes and
loading them to vehicle for delivery. However, the observation varied with that of Ndaghu et al. (2011) who
reported male dominance in the firewood trade in Yola. A similar case has been reported by Ikurekong et
al. (2009) and Muregerera (2008) who noted that firewood collection was done mostly by women in
subsistence level as they tended to concentrate more on cutting and picking of the fallen dead woods
compared to their male counterparts, while the male dominated the large commercial firewood marketing
and other agricultural activities that were labour demanding (Kwaghe, 1999; Ani, 2004; Fidelia, 2005).
Educationally, 93% of the respondents had formal education. This result showed that literacy level
among the marketers was high. According to Velde (2005), education helps to attract private capital. The
high literacy rate in the study area implied that the traders possessed the ability to outsmart their competitors
as they could easily access market information and use of more efficient technology that would enhance
their output or sales to help them increase their productive capacities. this was in agreement with
Christiansen et al. (2003) that households with higher education were less likely than others to fall into
poverty, and more likely to escape from it, and far more likely to benefit from growth.
Tables 2 further indicates that majority (53%) of the respondents were married and had a household
size of 1-5 persons. According to Taphone (2009), married people had more responsibilities such as the
provision of foods, education and health and well-being of their spouses and children. This could be the
reason why the business was dominated by the married people unlike the case for the singles who probably
had no other people to take care of beside themselves.
Table 2: Demographic characteristics of respondents
Variables Itam market Afaha market Akpan Andem market Total
Gender
Male 3 (6) 2 (12) 2 (17) 7 (8)
Female 44 (94) 14 (88) 10 (83) 68 (92)
Total 47 (100) 16 (100) 12 (100) 75 (100)
Age
< 30 9 (19) 2 (13) 2 (17) 13 (17)
31 – 40 12 (26) 5 (31) 4 (33) 21 (28)
41 – 50 15 (32) 6 (37) 3 (25) 24 (32)
> 50 11 (23) 3 (19) 3 (25) 17 (23)
Total 47 (100) 16 (100) 12 (100) 75 (100)
Level of Education
Non Formal 5 (11) 0 (0) 0 (0) 5 (7)
Primary 19 (40) 4 (25) 5 (42) 28 (37)
Secondary 17 (36) 11 (69) 7 (58) 35 (47)
Tertiary 6 (13) 1 (6) 0 (0) 7 (9)
Total 47 (100) 16 (100) 12 (100) 75(100)
Marital Status
Single 9 (19) 5 (31) 3 (25) 17 (23)
Married 38 (81) 12 (69) 9 (75) 58 (77)
Total 47 (100) 16 (100) 12 (100) 75 (100)
Household Size
1-5 persons 27 (58) 7 (44) 6 (50) 40 (53)
6 -10 persons 19 (40) 9 (56) 4 (33) 32 (43)
> 10 persons 1 (2) 0 (0) 2 (17) 3 (4)
Total 47 (100) 16 (100) 12 (100) 75 (100)
( ) = Figures in parenthesis are percentage value
31Economic analysis of firewood marketing Nelson et al. 5(2):26-43 (2017)
Operation and funding
Firewood trade in Uyo Metropolis appears to be a relatively old business. Results in Table 3 indicated
that majority of the traders (62%) had been in the firewood trade for more than 10 years and were engaged
in it on a full-time basis (76%) as their major job, while the remaining 24% engaged in the trade on a part-
time basis in addition to other jobs. The traders’ engagement in the firewood trade could also be attributed
to their inability to get a favourable job due to the high rate of unemployment in the state and because they
believed that it was profitable. The growth in trade also indicates the economic viability and the support,
which the trade offers the households of the traders (Adeyemi and Ibe, 2014). Accordingly, their experience
in the business counts, considering the fact that the more the number of years a marketer spends in business
the more likely such a marketer would know the intricacies of the business which could possibly enhance
the gross margin, thus making him or her stay longer in the business. This is explained in the yearly income
level of the traders in Table 3. The result (Table 3) indicates that 36% of the traders had a yearly income of
$554 – $830, followed by those who generated $831 - $1107 (25%) and $278 – $553 (17%) annually
respectively.
Also indicated in Table 3 was number of firewood traders who were members in the Firewood Traders’
Association. The results showed that 63% of the traders belonged to the association. However, this number
of members was only obtained in one of the study markets (Itam market). The traders in the other two markets
(Akpan Andem market and Afaha Itam) did not belong to any association. This could be attributed to the
market structure present in each market. There existed quite a large number of firewood marketers in Itam
market due to its strategic location compared to the other two markets. The existence of the association, apart
from collecting dues and settling issues that may arise among the traders in that market, discouraged non-
members engaging in the trade. Similarly, the lack of association in Akpan Andem and Afaha market could
be attributed to the few numbers of firewood traders trading in the products and their preference to operate
alone to avoid payments which they considered as unnecessary.
All business ventures require capital for the start-up so as to cover the cost of land/rent, equipment,
buildings, supplies, labour, and stock (Nelson, 2015). The result in Table 3 revealed that majority (88%) of
the respondents used their personal funds to start the trade. This was in line with the observation of Nelson
(2014) who reported 85.71% of the sampled respondents using personal funds in the establishment of their
ornamental plant businesses. Also supporting this claim was Gulani and Musa (n. d.) who observed that
about 76% of small and medium scale entrepreneurs funded their businesses from their personal accounts.
This could be attributed tothe inability of the respondents to acquire credit facilities from the bank as it
involved the use of collateral. This observation was in agreement with those of other studies (Olagunju and
Adeyemo, 2008; Omonona et al., 2010; Ekwere and Edem, 2014; Asogwa et al., 2014) that the reason for
the decline in the contribution of small and medium scale enterprises to the nations’ economy was lack of a
formal national credit policy and paucity of credit institutions that should assist farmers in the provision of
chemicals, fertilizers and other inputs that would improve their economic condition to be self-sufficient and
self reliant in food production. This adversely affected their ability to venture into larger scale operations as
they could not bear the cost of production from their lean resources. This was, for instance, why only 3%of
the respondents engaged in wholesale trade (Table 3). The importance of micro, small and medium scale
enterprises cannot be overemphasized. They are known to adapt with greater ease under difficult and
changing circumstances because they are typically low in capital intensity and allow product lines and inputs
to be changed at relatively low cost (Evbuomwan et al., 2013; Olorunshola, 2003). They also retain a
competitive advantage over large enterprises by serving dispersed local markets and produce various goods
with low scale economies for niche markets (Evbuomwan et al., 2013; Olorunshola, 2003).
32Eurasian Journal of Forest Science 5(2):26-43 (2017)
Table 3: Funding and mode of business operation of respondents in the study area
Variables Itam market Afaha market Akpan Andem Total
Years in business
< 5 years 7 (15) 1 (6) 0(0) 8 (11)
6 – 10 years 11 (23) 5 (31) 4 (33) 20 (27)
11 – 15 years 21 (45) 7 (44) 6 (50) 34 (45)
> 15 years 8 (17) 3 (19) 2 (17) 13 (17)
Total 47 (100) 16 (100) 12 (100) 75 (100)
Member of a Firewood Association
Yes 47 (100) 0 (0) 0 (0) 47 (63)
No 0 (0) 16 (100) 12 (100) 28 (37)
Total 47 (100) 16 (100) 12 (100) 75 (100)
Engagement in Business
Full time 36 (77) 13 (81) 8 (67) 57 (76)
Part-time 11 (23) 3 (19) 4 (33) 18 (24)
Total 47 (100) 16 (100) 12 (100) 75 (100)
Scale of operation
Wholesale 2 (4) 0 (0) 0 (0) 2 (3)
Retail 47 (96) 16 (100) 12 (0) 75 (97)
Total 47 (100) 16 (100) 12 (100) 77 (100)
Source of capital
Family/Individual 39 (83) 15 (94) 12 (100) 66 (88)
Friends/Gift 3 (6) 1 (6) 0 (0) 4 (5)
Loan 5 (11) 0 (0) 0 (0) 5 (7)
Total 47 (100) 16 (100) 12 (100) 75 (100)
Yearly income ($)
< 277 2 (4) 2 (13) 0 (0) 4 (5)
278 – 553 7 (15) 5 (31) 1 (8) 13 (17)
554 – 830 17 (36) 4 (25) 6 (50) 27 (36)
831 - 1107 12 (26) 4 (25) 3 (25) 19 (25)
1108 - 1383 7 (15) 1 (6) 2 (17) 10 (14)
> 1383 2 (4) 0 (0) 0 (0) 2 (3)
Total 47 (100) 16 (100) 12 (100) 75 (100)
( ) = Figure in parenthesis are percentage value, 1 USD = ₦361.50
Sources of firewood and market location
Tables 4 and 5 present the sources of the firewood marketed and consumed in the study area and the
locations of the markets. A great bulk of the firewood (84%) traded in the study area was bought from the
markets in the rural area of Ibiono and 16% was obtained directly from farmlands or fallow lands. None of
the traders reported obtaining their goods from any forest land or plantation. These facts attest to the impact
of urbanization, which seldom results in the depletion of forest lands within the urban centres as a result of
infrastructural development and settlement establishments. Considering the pressure or demand for firewood
in the urban centre due to the ever expanding market, increasing population and most recently, the removal
of the subsidy in petroleum products in the country, there is bound to be serious consequences on the
available forest resource, especially wood products.
The desire to balance the demand for firewood in the urban market will imply increasing the supply,
thus more exploitation of the forest (protected forest) for firewood. Extraction of wood within these supply
areas will clearly affect the forest and the environment. Some of these impacts can be seen in the study areas.
The rainfall has become increasingly irregular and biodiversity lost. These communities sometimes
experience flooding and droughts which adversely affect the most important sector in the country's economy,
33Economic analysis of firewood marketing Nelson et al. 5(2):26-43 (2017)
agriculture. These impacts affect not only the environment but the whole social economy. Also, due to
increasing economic hardship in Nigeria, many people are finding it increasingly difficult to afford
conventional fuels; hence, profit-energy supply pattern compels firewood suppliers to cuttrees
indiscriminately from marginal forests, with little regard for environmental consequences (Orimoogunje and
Asifat ,2015).
Table 4: Sources of firewood traded in the study area
Sources of fuelwood Itam market Afaha market Akpan Andem market Total
Forest 0 (0) 0 (0) 0 (0) 0 (0)
Plantation 0 (0) 0 (0) 0 (0) 0 (0)
Farmland/Fallow land 9 (16) 5 (24) 0 (0) 14 (16)
Market 47 (84) 16 (24) 12 (100) 75 (84)
Total 56 (100) 21 (100) 12 (100) 75 (100)
( ) = Figure in parenthesis are percentage value
Table 5: Location of firewood markets where the traders purchase their products
Names of Markets Itam market Afaha market Akpan Andem market Total
Oko Ita - Ibiono 47 (14) 16 (16) 12 (14) 75 (14)
Ikot Ekwere -Ibiono 39 (11) 6 (5) 4 (5) 49 (10)
Ikot Ada Idem - Ibiono 47 (14) 16 (16) 12 (14) 75 (14)
Ikpa Ikot Ubo - Ibiono 42 (12) 16 (16) 12 (14) 75 (14)
Nkwa - Ibiono 47 (14) 16 (16) 12 (14) 75 (14)
Oku Obom - Ibiono 47 (14) 16 (16) 12 (14) 75 (14)
Itukho - Ibiono 32 (9) 9 (8) 11 (13) 52 (10)
Ono Ikot Itiat - Ibiono 23 (7) 4 (4) 7 (9) 34 (7)
Obio Ediene - Ikono 6 (2) 1 (1) 0 (0) 7 (1)
Ikot Idomo - Ikono 8 (3) 1 (1) 2 (3) 11 (2)
Ikot Essen - Uruan 0 (0) 1 (1) 0 (0) 1 (0)
Akpa Utong - Ibesikpo Asutan 1 (0) 0 (0) 0 (0) 1 (0)
Total* 339 (100) 102 (100) 84 (100) 525 (100)
( ) = Figure in parenthesis is percentage value; * values are multiple entries of answers
Firewood marketing channels in the study area
As indicated in Figure 1, an indirect or a two levelmarketing channel exist in the study area. This
marketing channel is in accordance with Taru and Ndaghu (2013). All the urban sellers bought either in bulk
or retail directly from the retailer at the village market. The urban sellers then retail the product to home
users, bakeries, food sellers, suya/chicken joints, and local food processing units in a form that was
convenient for them to buy. For bulk purchasers such as bakeries, the consumers could deal directly with
harvester, thereby by-passing the middlemen. Middlemen influence the price of the product (Leach and
Means, 1988; Minhaj, 1996).
34Eurasian Journal of Forest Science 5(2):26-43 (2017)
Key
P = Producer (Rural) C = Caterers
RW = Rural Wholesaler D = Domestic use
UW = Urban Wholesaler S = Soya and Chicken roasting
UR = Urban Retailer F = Food Vendor
B = Bakeries
Figure 1: Firewood marketing channel in Uyo Capital City, Akwa Ibom State, Nigeria
Firewood species traded and most patronized
The result in Table 6 indicates the list of ten commonly sold firewood species in the study area, their
uses and characteristics. The species were distributed among nine families. The family Fabaceae had four
species, followed by Euphorbiaceae and Apocynaceae with two species, while the rest had one species each.
The species Dactyladenia barteri(Hook.f. ex Oliv.) was the most traded firewood and mentioned by all
respondents as the most desirable firewood species. This was attributed to its lighting, burning properties and
availability in the market. Species such as Brachystegia eurycomaHarms,Uapaca guinensis Müll.Arg.,
Pentaclethra macrophylla Benth. and Dacryodes edulis (G.Don) H.J.Lam were mostly sold to bakery operators
who preferred them because of their sizes and burning properties. However, the findings varied with that of
Akpan, Wakili and Akosim (2007) who reported thatthe most common tree species being used as fuel wood
for energy include: Marke (Anogeisus leocarpus), Tsamia (Tamarindus indica), Kadanya (Vitellaria
paradoxa), Samji (Ficusplatiphyla), Kiriya (Prosopis africana), Dorowa (Perkia biglobossa), Doka
(Isoberlinia doka), Taura (Detariummacrocarpum), and Kaiwa (Diosperusmesphiliformis).in Bauchi State,
Nigeria.
35Economic analysis of firewood marketing Nelson et al. 5(2):26-43 (2017)
Table 6: Species traded, characteristics and users in the study area
Scientific name Family Common name Local Major users Characteristics of species
name
Chrysobalanaceae Monkey friut Ukang Household use, Wood is hard, easily light,
Dactyladenia restaurants, produce much heat,
food vendors, charcoal and burn for a
barteri (Hook.f. ex Bakery long period, does not
Oliv.) produce smoke
Alchornea cordifolia Euphorbiaceae Christmas bush Ubom Household, Wood is light and soft,
(Schumach. and Thonn.) restaurants does not produce as much
Müll.Arg. heat.
Anthonotha macrophylla Fabaceae African rosewood Nya Households The wood is hard,
P.Beauv produces heat
Macaranga barteri Mull.- Euphorbiaceae African nut tree Akpab Households Burns with heat, does not
Arg. burn for long, produces
sparks and burns up
quickly
Dialium guineenses Willd. Fabaceae Velvet Tamarind Ukuk Households Burns with minimal heat,
produces charcoal
Harungana Clusiaceae Haronga Oton Households Wood is light in weight
madagascarensis Lam. ex and burns with heat
Poir
Bombax buonopozense Malvaceae silk cotton tree Ukim Households Burns with minimal heat,
P.Beauv. does not burn for long
Alstonia boonei Apocynaceae African nut tree Ukpo Households Burns with minimal heat,
De Wild. does not burn for long
Barteria nigritiana Passifloraceae Ant tree Ekpae- Households Burns with heat and
Hook.f. kpang produces sparks a
Funtumia elastic(Preuss) Apocynaceae Rubber tree Eto okpo Households Burns with minimal heat
Stapf
Brachystegia eurycoma Fabaceae Achi Achi Bakery Mostly preferred by the
Harms bakery's because of its
heating quality, ability to
sustain heat through its
charcoal and does not
produce smoke
Uapaca Phyllanthaceae Sugar plum Mkpenek Bakery The wood produces a
guinensisMüll.Arg. good firewood and
charcoal
Pentaclethra macrophylla Fabaceae Oil bean tree Ukana Bakery The wood is used as
Benth. firewood and charcoal
Dacryodes edulis (G.Don) Burseraceae Bush butter tree Eben Bakery The wood is used mainly
H.J.Lam for fuel
Cost of fire wood trade in Uyo Capital City
Table 7 shows the analysis of costs associated with firewood marketing in the study area. For the
variable cost, purchase cost accounted for more than 69% with a mean of $160.29/month followed by
transportation cost (23.29%; $53.93/month /month), rent (4.76%; $11.01/month) and market tax (1.30%;
$3.01/month), while rope was the least variable cost (0.43%; $1.01/month). In the fixed cost, the cost for
wheel barrow was the highest ($8.82/month, 62.64%), followed by machete ($3.98/month; 28.27%) while
axe was the least fixed cost ($1.28/month; 9.09%).
The mean monthly TVC in the study area was $231.51 amounting to 94.27% of the total cost of
firewood, while the mean TFC ($14.08) amounted to the remaining 5.73%. In the total cost, the cost of
purchasing firewood was the highest (65.26%), followed by transport (21.96%) and rent (4.48%), while the
cost of rope was the least (0.42%).
The high percentage of firewood cost followed by transportation cost in the study was in line with the
observation of Taru and Ndugu (2013) in Adamawa State and Ebe (2014) that purchase cost was as high as
36Eurasian Journal of Forest Science 5(2):26-43 (2017)
78.92% of total costs incurred by wholesalers, followed by transport with 14.83% in Enugu State. It however,
contrasted with the finding by Aeez et al. (2014) that labour cost accounted for the highest percentage
(42.2%) of the total cost incurred in fuelwood trade, followed by purchase cost and transportation cost. The
high cost of transportation was attributed to poor condition of roads or inaccessibility of some of the roads
especially during the rainy season and, in some instances, scarcity of fuel.
Table 7: Total Cost of Firewood trade in Uyo Capital City, Akwa Ibom State, Nigeria
Variables Total Cost/year Mean Percentage (%) % of Total Cost
Variable Cost (VC) ($)/Month
Purchase cost 12022 160.29 69.24 65.26
Transport 4044.81 53.93 23.29 21.96
Labour 170.12 2.26 0.98 0.92
Rent 825.73 11.01 4.76 4.48
Market tax 226.14 3.01 1.30 1.23
Rope 75.1 1.01 0.43 0.42
Total Variable Cost (TVC) 17363.91 231.51 100.00 94.27
Fixed cost (FC) ($)/Month
Axe 96.01 1.28 9.09 0.52
Wheel barrow 661.82 8.82 62.64 3.59
Machete 298.76 3.98 28.27 1.62
Total Fixed Cost (TFC) 1056.59 14.08 100.00 5.73
Total Cost (TC)(₦)/Month = TVC + TFC
18420.50 245.59 100.00
1 USD = ₦361.50
Profitability analysis of firewood trade in Uyo Capital City
The results in Table 8 show that the average total revenue generated from the sales of firewood was
$339.95/month, with an average total variable cost of $231.52/month and a mean total gross margin of
$108.43/month. The results revealed that the mean estimated total fixed cost incurred by the respondents in
the study area was $14.09/month. This cost (total fixed cost) was deducted from the mean total annual
revenue to obtain the total net revenue as shown in Table 7. Thus, firewood traders in the area had mean
monthly net revenue of $325.86 (Table 8). The profit analysis showed that the net profit for the firewood
trader in the study area was ₦$94.34 monthly.
As compared with the findings of Taru and Ndagu (2013) with a profit of $5.90 (₦2,132.91) for
fuelwood traders in Adamawa State, the estimated profit of firewood traders in study area was very high.
This could be attributed to the level of patronage in the area. According to Azeez et al. (2014) and Ebe
(2014), the economic benefits and total output values of the enterprise was significant and the income that
accrued from it and other fuelwood products were very significant and contributed substantially to
households’ income of the firewood traders.
37Economic analysis of firewood marketing Nelson et al. 5(2):26-43 (2017)
Table 8: Total profit of Firewood trade in Uyo Capital City, Akwa Ibom State, Nigeria
Variables Total Mean
Gross Margin (GM) (₦)
Total Annual Revenue (TAR) 25496.27 339.95
Total Variable Cost (TVC) 17363.9 231.52
Total Gross Margin (TAR - TVC) 8132.37 108.43
Net Revenue (NR) (₦)
Total Annual Revenue (TAR) 25496.27 339.95
Total Fixed Cost (TFC) 1056.60 14.09
Total Net Revenue (TAR - TVC) 24439.67 325.86
Profit (₦)
Total Annual Revenue (TAR) 25496.27 339.95
Total cost (TVC + TFC) 18420.50 245.61
Total Profit (TC) = (TAR - TC) 7075.77 94.34
Profitability ratio analysis (Table 9) of firewood showed a profit index (PI) of 53.00% of the final
selling price received by the retailers, while the remaining 47.00% went to wholesalers and gatherers of fuel
wood in the industry. This also indicated that out of every $1 earned; about $0.53 accrued to the marketer as
profit after accounting for all costs. Also, with an RRI of 110.59%, a marketer earned $110.59 profit on every
naira spent on fuel wood business, while the RRVC of 232.46% indicated that every $1 cost incurred on
variable inputs generates about $232.46. Moreover, the operating ratio of 0.37 indicates that every $1spent
on total variable cost yielded $0.37 as total revenue. It can therefore be concluded that firewood business in
the area was very profitable.
Table 9: Profitability ratio of firewood trade in Uyo Capital City, Akwa Ibom State, Nigeria
Profit Index (PI) = Profit / TR 0.53
Rate of Return on Investment (RRI) = (Profit / TC) *100 110.59
Rate of Return on Variable Cost (RRVC) = TVC / TR 232.46
Operating Ratio (OR) = TVC / TR 0.37
Factors influencing profitability of firewood trade in Uyo Capital City
The influence of various factors on the profitability of firewood marketing was captured by the
ordinary least square regression model. The overall goodness of fit (F-value) showed that the model was
significant at 1% and that the entire coefficients estimated by the model were not all equal to zero. The R-
squared value of 0.565 indicated that about 57 percent of the variations in the profitability index of firewood
marketing was brought about by variation in the explanatory variables used in the model. Mode of
engagement and scale of operation had significant and positive effect on revenue (pEurasian Journal of Forest Science 5(2):26-43 (2017)
Educational status (pEconomic analysis of firewood marketing Nelson et al. 5(2):26-43 (2017)
Conclusion and Recommendation
Firewood trade in Uyo Capital City is a profitable business. Most of the firewood traded is obtained
from the rural areas precisely from parts of Ibiono Local Government Area and there is a one-level marketing
channel in the study area. Age of trader (pEurasian Journal of Forest Science 5(2):26-43 (2017)
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